Conversation with Trader Eric: Technical Analysis and Trading Strategies

Eric is a day trader of a self-operated fund in the US stock market, currently operating the "Million Trader" community, providing quantitative tools and training for traders. Here are the key points of the conversation with Eric:

1. Eric's Trading Strategy

1. Asset Allocation:

   • Most funds buy spot
   • A portion of the funds is used for stable returns on the exchange
   • Retain some idle funds

2. Trading Logic: Short-term + Trend + Dollar-Cost Averaging

3. Trading Experience:

   • Before August 2022: pure short-term trading
   • After August 2022: Gradually shift towards swing trading, trends, and dollar-cost averaging

4. Reasons for Change:

   • The scale of funds has expanded, making it difficult to accurately control short-term operations.
   • Changes in the market environment
   • Need to earn long-term trend returns

5. Target audience for the strategy: those willing to operate continuously and review operations.

2. Technical Analysis and Trading Skills

1. The essence of K-line:

   • Expression of price within a unit of time
   • Cannot reflect institutional costs, counterparty, liquidity, etc.

2. Limitations of Technical Analysis:

   • Different schools of thought can explain the market across different time dimensions.
   • Need to combine strategy building and statistical advantages
   • Unable to see the cost and intentions of the market maker

3. Moving Average Usage Techniques:

   • Establish trend framework: go long above the moving average, go short below it.
   • Use multiple time frame windows and Technical Analysis indicators to find entry points.
   • EMA200/MA200 is often used to determine the major trend.

4. Altcoin Selection:

   • Choose the currency that has gone through the complete cycle of ( brewing, breakthrough, explosion, and exhaustion ).
   • The complete cycle reflects the attention and liquidity of funds
   • Technical Analysis Assumption: History Repeats Itself

5. Steps for Beginners to Learn:

   • Set funding and time limits
   • Learn different strategies and methodologies
   • Conduct 100 trades and review them

3. Trading Psychology and Risk Management

1. Maintain a sense of reverence for the market
2. Pay attention to risk control, do not try to beat the market.
3. Trading strategies should be executed mechanically to avoid frequent changes.
4. When the amount of funds increases, it is necessary to expand the trading boundaries and continuously learn.

4. Recommended Resources

1. Recommended Traders:

   • Anton Kreil: Former Goldman Sachs and Morgan Stanley trader
   • Warrior Trading(Ross): Short-term Trading Expert
   • Teacher Ni: Continuously provide high-quality market analysis

2. Recommended Books:

   • "The 10,000 Hour Rule"
   • "Deliberate Practice"
   • "Cognitive Talent"

Eric emphasized that trading requires long-term practice and review, and there are no shortcuts. Beginners should set capital and time limits, and improve their trading skills through continuous practice and summarization.